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CHRISTINE ROMANS, CNN ANCHOR: A potentially lame-duck Fed chief speaks and a bull market is stopped in its tracks.

Hello, everyone. I'm Christine Romans. This is YOUR MONEY. In two days the Dow lost 559 points. Thursday's loss was the worst of 2013 so far. But from the start of the year to Tuesday, June 18, come on, the Dow was up more than 2,000 points. It wasn't just stocks. Take a look, though, at gold. It tanked as well, now less than $1,300 an ounce. It was above $1,800 less than a year ago. Oil prices dropped as well, plus bond yields surged and the U.S. dollar jumped.

This was not just the stock market tanking. Every market moving, every market responding to the Fed chief. Maggie Lake is a business news anchor on CNN International, Richard Quest host of "QUEST MEANS BUSINESS" also on CNN. Was this pullback inevitable. We just said from the beginning of the year the market up 2,000 points. This was a big excuse to take profits.

MAGGIE LAKE, CNNI BUSINESS CORRESPONDENT: It absolutely it was. And essentially when you see those numbers, it feels so scary, but when I ask people, is this fundamental? Is there something wrong with the economy? So many people came back to me and said it's hedge funds taken out. They have double digit gains. They want to lock them in. They're resetting, moving to cash, resetting, and it's going to be temporary. So it wasn't nearly as scary. It really was hedge funds, that fast, short-term money. Not the long term, people.

ROMANS: So Ben Bernanke didn't say we're taking money out of the economy. He didn't say we're putting on the brakes. He said sometime in the future, when the unemployment gets to seven percent, we will slow down on the accelerator.

LAKE: And this is exactly what people wanted them to do, and it's exactly how they should do it. Give them lots of time to adjust, lay out the framework, give them exact details. This is when we think we're going to do it. We're going to do it gradually. And if the economy weakens, we're going to get back in and make sure it's OK.

ROMANS: Richard Quest, here we go. Ben Bernanke says the Fed will pull back its stimulus measures as the economy improves. So that should be a good thing that the Fed chief is giving a roadmap for that. That means the U.S. economy can stand on its own. That means that the U.S. economy is healing. But then you have nagging concerns about the rest of the world, a recession in Europe, China's growth seems to be slowing. The global worries are one reason why stock investors are so concerned about a pull-back from the fed right now.

RICHARD QUEST, HOST, CNNI QUEST MEANS BUSINESS: This is a classic case of heads you win, tails I lose. It doesn't matter what Bernanke would have said, the markets are ready to fall out of bed. It's perverse, it's obscure, it's childish, it's all those things. But here's the reason, because a lot of investors have gone for exotic emerging markets with very narrow exits. And when, of course, things start to change, they all head for the door at the same time.

You're absolutely right. The mere fact that he will be taking his foot off the gas is because the car is going fast enough on its own. So you have to put it into context. Do I think we should be concerned at the hiccup, bucolic plague of the last week? Absolutely not. The markets knew it was coming and they're just having a nasty bout of indigestion.

ROMANS: Richard, what about China? How important is China's growth in this scenario, because really that was a big part of this nervousness. China factory output weaker than expected. Last year China's growth was the weakest in 13 years. If the Fed is pulling back the same time China is slowing, that could have repercussions for currencies, for metals, for demand around the world.

QUEST: Once again, China is going too fast, eight, nine percent. The sky is falling in. Inflation, it's a disaster. China is only growing at 7.5 percent, six to 7.5 percent. It's awful, it's terrible. Which is it? The truth is China needs to slow down and moderate its growth, and that's exactly what we are seeing.

But the markets, the global markets live their life on the edge of a precipice fueled by sugar rushes of individual pieces of information, and that's why you get this volatility. And the difference from the past to now, as Mike was saying, it's hedge funds, it's trading, it's all the different mechanisms. Balancing this global economy in this new era ain't going to be easy.

ROMANS: OK, the taper, Maggie, the taper, this word now that has become the new "QE," the new "fiscal cliff," the horrible word that people throw around, the taper. If he does the taper, it means the U.S. economy is healthy.

LAKE: It should mean that, and that's why you hear that the market has had a taper tantrum. We're stuck with it for the moment. The one thing we're seeing, though, is the deep emotional scars of what happened in the global financial crisis. And that's what Richard is touching on as well. We are on edge all the time because even in China they start to take a little excess out. It's a credit crunch. It's what happened before Lehman. That was in the brokerage notes this week.

We have to take a little of the emotion out, start to talk to people with a longer term perspective. They will tell you, that's right, the economy is doing better. That means the Fed can exit, things are healing, and they're there in case we have a wobble. So this is exactly, and tapering is not tightening, as Ben Bernanke tried very much to point out. They are not stepping on the brake. They're just taking their foot off the gas.

QUEST: And there is an effective tightening, a minor tightening taking place, of course. And this is where we have to distinguish between if you like the big picture, which Maggie was talking about where the economy is moving and we should be pleased. But there is a highly technical point, of course, that as accommodation or as tapering takes place bond yields will rise. That requires investors to start thinking about where they're going to put the money. If bond yields are rising, mortgages will rise and call earns will rise.

LAKE: You want to take that excess out. There are bubbles forming and the Fed wants to stop that.

QUEST: But that is a de facto tightening, albeit minor, and so there you will see the specialists starting to scratch themselves and say something is going on. But the big picture, which is what you and I need to concentrate on, the big picture is looking rosy.

ROMANS: I'm not scratching anyone anywhere, Richard Quest. I'm just trying to keep my 401(k) properly balanced and make it to the next week. Richard Quest, Maggie Lake, thank you so much.

Next, a dysfunctional government, crumbling infrastructure, crushing levels of student debt, stagnant wages -- do you feel like you're living in America that parallels Rome before the fall? I'm going to give you the facts.

And then --

(BEGIN VIDEO CLIP)

MORGAN SPURLOCK, HOST, CNN'S INSIDE MAN: There it is, wow. Not only now do I have a card which makes me have the ability to buy pot in the state California, but because I have this form, which I was even more shocked by, now I have the ability to grow marijuana.

(END VIDEO CLIP)

ROMANS: CNN's inside man Morgan Spurlock joins me.

(COMMERCIAL BREAK)

ROMANS: One America but two different economies. If you have money, this economy is working for you. The housing market is hot again, stocks have been soaring to all-time highs despite the market being rocked this week, and many companies are reporting solid profits. They're sitting on record piles of cash.

But for millions of Americans it's a sluggish recovery that's prompting fears for a fundamental shift toward a bleaker economic future. Let's start with jobs. It's true that hiring has picked up, but a third of Americans now make $24,000 a year or less. Our economy is only growing at a two percent annual rate, much lower than we need, and that's not even on its own. The Federal Reserve gets much of the credit there.

As for paying the bills, every man, woman and child in America now owes more than $50,000 for their share of government debt. But don't look to your elected leaders for any serious, long-term solutions. The International Monetary Fund recently says the reckless forced spending cuts at the beginning of this year cut GDP growth 1.5 percentage points. All this makes us wonder, is the U.S. like Rome before the fall? Movies like "Gladiator" depicted the height of the empire's supremacy, but last time I checked, the Roman Empire is ancient history.

(BEGIN VIDEOTAPE)

ROMANS: How does this turn into this? Historians tell us the Romans, like many civilizations before and after, collapsed under the weight of too much debt. An overextended military, debilitating partisanship, and fiscal irresponsibility drove the Roman empire into the ground.

Does any of that sound familiar? The U.S. currently has $16 trillion in debt, up from less than $1 trillion in 1980. Driving that debt, tax cuts for the rich, two expensive wars in the Middle East, and prolific spending to blunt an economic downturn. On top of what we already owe, there is another $20 trillion to $50 trillion the government will need to fulfill its promises on Social Security and Medicare as the baby boomers retire, and partial gridlock in Washington has crushed any hope of progress.

REP. JOHN BOEHNER, (R) HOUSE SPEAKER: The Republicans want to balance the budget. The president doesn't.

NANCY PELOSI, (D-CA) HOUSE MINORITY LEADER: While the bulk of this deficit was being amassed, I didn't hear them say boo.

ROMANS: Just like the Senate of the Roman Empire, the U.S. Congress is divided against itself. And a brand new CNN/ORC poll shows just 16 percent of Americans approve of how they're handling their job. With short-sighted budgeting and planning, it begs the question even as we see signs of a recovery taking hold, are we really just Rome before the fall?

(END VIDEOTAPE)

ROMANS: And that is a question Glenn Hubbard is uniquely qualified to answer. He's the former chairman of George Bush's Council of Economic Advisers and currently the dean of Columbia University Graduate School of Business. He's the author of a new book, "Balance, The Economics of Great Powers from Ancient Rome to Modern America." Glenn, do you see parallels?

GLENN HUBBARD, DEAN, COLUMBIA UNIVERSITY GRADUATE SCHOOL OF BUSINESS: There are parallels. Great powers stumble when their politics don't keep up with economics and when they turn inward. In the book I look at a number of historical case studies. The U.S. can get out of this, but it requires fixing the politics you talked about. ROMANS: How do you fix it?

HUBBARD: There are two tracks. One, we have to have more competition for political ideas rather than having just the Republican and democratic parties having a monopoly on discourse. And we're going to have to change the budget rules. Those big budget numbers you talked about have to be fixed, and currently our leadership isn't doing it.

ROMANS: For the budget, we have the biggest business in the world and we're operating without a real balance sheet. That's a problem. Look, Fed Chairman Ben Bernanke, he gave some specifics for a framework of when stimulus could end because, let's be honest, monetary policy is something that's been very clear when fiscal policy has not. Markets got spooked this week. Did he do the right thing this week, do you think?

HUBBARD: First, I think we're all expecting too much of the Fed. The government needs to do its part and politicians really are not. I think the Fed was trying to communicate a gradual exit. I didn't see it as that newsworthy, but, yes, it certainly spooked the markets.

ROMANS: It really spooked the markets. Do you think it's warranted, or is this pricing it all in for when the Fed is going to have to come back? It's going to have to take its foot off the accelerator, as Ben Bernanke said. Is this a market that's pricing it in and we get over this eventually?

HUBBARD: I think that's likely. Basically the Fed is going to have to remove the punch bowl at some point, and I think everyone understands that. People obviously hesitate to have a punch bowl removed and we're seeing the market dislocate.

ROMANS: Let's talk about wealth, entrepreneurship in places like Europe and Asia, what there amounts to nearly 50 percent of all new wealth, entrepreneurship. Here in the U.S. it's only 21 percent. You have new Center for Entrepreneurship at Columbia. Do you fear this country falling behind when it comes to innovation and creativity, and how do we make sure it doesn't happen?

HUBBARD: That is the question for Americans. We have led the world in our productivity and our technological prowess because of entrepreneurship, because of innovation. If we want that to continue, we have to continue to support basic research and provide a favorable climate for entrepreneurs, not so much regulatory red tape and tax burdens.

ROMANS: I think every university in America should have a mandatory class for entrepreneurship, because kids are coming out of college. They're not going to have the sort of pact with corporate America that my generation or my parents' generation had.

HUBBARD: I couldn't agree more. And it's also just learning to think like an entrepreneur. Even if you're not starting a business, being able to spot an opportunity and grab it before someone else is what every business person needs be able to do. ROMANS: So let's look at the macro level and the U.S. again. If the U.S. is failing, the natural question is, who is rising? Many people in this country consider that answer, Glenn, is China. But you say in your book that concerns about China overtaking the U.S. are overblown.

HUBBARD: I think so. I actually think the U.S. will remain on top. In the book Tim Kaine, my co-author and I, constructed an index of economic power and project it going forward. We see the U.S. in the lead. China has real problems in its financial system and in its own political system.

ROMANS: So we don't need to get that concerned about that at this point also because you pointed out the purchasing power parity of people in China is not what it is here. It is a rapidly growing economy, but still it's far, far below the potential of the U.S., still.

HUBBARD: That's right, but it's not an excuse for complacency here. We've got to get better politics in Washington.

ROMANS: All right, better politics in Washington. We'll hope from your lips to god's ears, or at least politicians' ears. Glenn Hubbard, nice to see you.

Coming up --

(BEGIN VIDEO CLIP)

SPURLOCK: According to the feds, Harbor Side is the largest illegal drug distribution center in the country. And today -- I'm Harbor Sides' newest tire.

(END VIDEO CLIP)

ROMANS: It's CNN's newest inside man, Morgan Spurlock, next.

(COMMERCIAL BREAK)

ROMANS: One America, two economies. The divides are clear. Education, wages, even obesity, the gap between how the rich and the rest live in this country is growing.

Morgan Spurlock has made a career of diving into all facets of American life. You remember him for the famous McDonald's diet from the documentary "Supersize Me." That when we first learned who Morgan Spurlock is. But now comes "Inside Man," his all new series premiering this Sunday night at 10:00 p.m. here on CNN. I want to give you a sneak peek at his very first episode, which takes you to the business of medical marijuana.

(BEGIN VIDEO CLIP)

SPURLOCK: So I'm locked in the back of a blacked out van somewhere in northern California being driven to an undisclosed location where they grow vast amounts of marijuana. There are some other stipulations that we have to follow now. We can't show you any of the people who work there. We can't show you the people's faces. We can't show hands or body parts. This isn't sketchy at all.

(END VIDEO CLIP)

(LAUGHTER)

ROMANS: Look at all the drama, in a dark van with just a little lighter. The whole idea of medical marijuana does have us skeptical. What did you learn coming out at the other end that you didn't know when you went in?

SPURLOCK: For me, I pictured a lot of guys with dreadlocks saying, dude, I got my card, I just want the good stuff. You imagine it's those types of people. And what I really discovered is there are people who have real, legitimate problems, people who are treating real, legitimate problems. Whether it's a soldier coming back from Afghanistan or Iraq with PTSD or someone who has had massive amounts of barbiturates prescribed to them and are using this to get off those medications, it's remarkable.

ROMANS: Also later in the season, you went inside orange grove. You're picking oranges.

SPURLOCK: I did.

ROMANS: And it reminded me that one-third of all jobs right now make $24,000 a year or less. Certainly picking oranges is one of those. Low wage job explosion in this country. It's really interesting to me that the demand and growth for jobs are jobs that are difficult and are very hard to do.

SPURLOCK: One thing to say is immigrants are coming over and stealing these types of jobs. Believe me, no one is racing out to get one of these jobs. Nobody wants a migrant farmworker job where it is back- breaking labor, you're working 12 hours a day and you're making $100. If you're doing well, you make $100. The day I went, I filled three buckets, so I would have made about $35 over a whole day.

ROMANS: So you're not a good orange picker?

SPURLOCK: I am one of the worst orange pickers ever.

ROMANS: But it's a real immigration debate, because there are those who say you get 12 million people who are out of work in this company, you get seven percent unemployment, and 12 million people who have been completely sidelined by the economy, at some point they might have to take those jobs.

SPURLOCK: They might have to take those jobs, and one of the things that's happening in the immigration debate right now is what if you gave those people the ability to work in this country, pay their taxes, even if they only make $20,000 or $30,000 a year, it would generate quite a bit of money.

ROMANS: Let's talk a little bit about education, because that's a really key part of the two Americas discussion that we've been having a lot. You spent time as a teacher in Brooklyn and as a teacher in Finland. Teachers in Finland and teachers in this country, they have very different career track.

SPURLOCK: One of the amazing things that's happened with Finland, which is fascinating, when they really started revamping education back in the late '60s and early '70s they said the key to us dealing with education is first to eradicate poverty. What they have done is eradicated poverty in the country. There is no really low lower class.

ROMANS: There's no socio-economic disadvantage when you are a kid.

SPURLOCK: That's correct, so from day one. And education from kindergarten all the way through college is absolutely free, paid for by the government. Every teacher that teaches in schools has a master's degree in education.

ROMANS: But not everyone can be a teacher. You have to like it.

SPURLOCK: It takes an tremendous amount of work. It is as hard to be a teacher there as it is to be a doctor. The average is about 300 people apply and they'll pick about 10 who actually become teachers. It is a difficult job.

ROMANS: All these threads are a conversation that all together makes up the American economy and the American conversation. I can't wait to see how you tell it and weave them together.

SPURLOCK: You're going to love the show.

ROMANS: Great. Thanks. Morgan Spurlock.

SPURLOCK: Thanks for having me.

ROMANS: Make sure you watch Morgan Spurlock this Sunday at 10:00 p.m. right here on CNN for the premiere of that new show "Inside Man." This week, medical marijuana, who is growing it, selling it, and getting it.

Do you know what the most important word on Wall Street means?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: The taper?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: I don't know.

UNIDENTIFIED MALE: What are the politics?

UNIDENTIFIED MALE: What is the taper?

(END VIDEO CLIP)

ROMANS: I'll tell you what it is and why you're 401(k) is riding on it.

(COMMERCIAL BREAK) ROMANS: So your 401(k) is probably worth less than it was the start of the week, sorry. Investors got spooked, and there is one word driving that fear, "taper." Taper, Wall Street's latest obsession.

(BEGIN VIDEOTAPE)

ROMANS: Hollywood has "it" girls, Wall Street has "it" words.

UNIDENTIFIED MALE: He has to stop with the bond buying and start to taper.

ROMANS: Taper is the latest "it" word on Wall Street.

DAVID LETTERMAN, LATE NIGHT TALK SHOW HOST: Ladies and gentlemen, this is tonight's Top 10 list.

ROMANS: It won't make Letterman's Top 10 list.

UNIDENTIFIED FEMALE: What is a taper?

UNIDENTIFIED FEMALE: What is the taper?

UNIDENTIFIED MALE: It's not a zoo animal or a CNN anchor or a way to wear your jeans. It's Federal Reserve Chairman Ben Bernanke's toughest job yet. How does he taper down from historic stimulus? It likely the final challenge for this chief.

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: He's already stayed a lot longer than he wanted or he was supposed to.

ROMANS: And he's done what no Fed chief has done before. Basically he's holding a fire hose, spraying $85 billion a month straight into the economy. It can't go on forever, and the obsession on Wall Street as to when it will end is probably the most important driver of your 401(k) right now.

"Taper" joins a list that includes "quantitative easing," "fiscal cliff," "sequester." Remember TARP? Sometimes the jargon sounds Greek to the rest of us. Speaking of Greece, "austerity" is the word there, opposite of be Bernanke's actions.

If he were a little rascal, he's be this guy throwing money from a window. The dilemma for the Fed, take away the training wheels too soon and the economy could crash. But fail to taper and this economy may not take flight on its own.

(END VIDEOTAPE)

ROMANS: To be clear, the taper won't start yet and the Fed will keep the fire hose on for now. Bernanke did lay out a roadmap for slowing the stimulus. That will likely start when we see seven percent unemployment. The unemployment rate currently stands at 7.6 percent.

Thank you for join the conversation this week on "YOUR MONEY." We're here Saturdays 9:30 a.m. and 2:00 p.m. eastern. We come back Sundays at 3:00 p.m. Until then you can find me on Facebook and Twitter. My handle is @ChristineRomans.